The global business travel industry continues its progress toward full recovery to 2019 pre-pandemic spending levels of $1.4 trillion, but recovery has hit some headwinds.
As many Covid-related recovery conditions have improved, many macroeconomic conditions have also deteriorated in early 2022. These new developments are impacting the timing, trajectory, and pace of business travel’s recovery, both globally and by region, pushing the forecast for full recovery into 2026 instead of 2024 as previously forecasted, according to the 2022 GBTA Business Travel Index Outlook – Annual Global Report and Forecast (published by the Global Business Travel Association and made possible by Mastercard).
Unveiled at the 2022 GBTA Convention in San Diego, the GBTA BTI is an annual study of business travel spending and growth covering 73 countries and 44 industries. Now in its 14th edition, this latest report outlines the outlook for global business travel from 2022 to 2026.
“To understand the headwinds that have been impacting a more accelerated recovery for global business travel, all you have to do is look at the news headlines since the beginning of 2022,” said Suzanne Neufang, CEO of GBTA. “The factors impacting many industries around the world are also anticipated to impact global business travel recovery into 2025. The forecasted result is we’ll get close, but we won’t reach and exceed 2019’s pre-pandemic levels until 2026.”
The previous BTI released in November 2021 predicted a rise in global business travel spending in 2022, reaching full recovery to the $1.4 trillion pre-pandemic mark by 2024.
Here are some highlights from the 2022 BTI outlook:
Total spending on global business travel reached $697 billion in 2021, 5.5% above the pandemic-era low of 2020. Last year was nearly as challenging as 2020 for the global business travel industry, as it sought to carve out a "normal following” the pandemic. In 2021, the industry gained back roughly $36 billion of the $770 billion lost in 2020.
Recovery was short-circuited by the Omicron variant and spike in global Covid cases in late 2021 and early 2022. As case numbers began to retreat, business travel surged. Global business travel spending in 2022 is expected to advance 34% to $933 billion over 2021 levels, recovering to 65% of pre-pandemic levels.
Recovery in 2022 was dependent upon and has been largely driven by improvement in the four factors of global business travel recovery. These four factors are the global vaccination effort, national travel policies, business traveler sentiment, and travel management policy.
Deteriorating economic conditions and shifting secular trends in 2022 have slowed global recovery. Hence, global business travel will almost reach pre-pandemic levels in 2025, reaching $1.39 trillion.
Global spending is not expected to make it fully back to the $1.4 trillion dollar mark until mid-2026. That’s when it’s forecasted to reach $1.47 trillion dollars. This adds an estimated 18 months to the industry’s recovery than was predicted in the previous GBTA Business Travel Index.
The 2022 BTI finds the biggest obstacles to more accelerated recovery in global business travel. These obstacles include persistent inflation, high energy prices, severe supply chain challenges and labor shortages, an economic slowdown and lockdowns in China, major regional impacts due to the war in Ukraine, and emerging sustainability considerations.
In all, global business travel spending is expected to gain 33.8% in 2022, but differences are anticipated across the world’s top business travel markets. The timing and pace of the recovery will continue to vary significantly from one region of the world to the next, as evidenced in 2021.
North America led the recovery in 2021 – driven largely by rapidly returning domestic travel. Western Europe was the one region to witness spending declines last year as Covid-19 impacted its domestic and regional business travel market. Both regions are expected to experience the sharpest recoveries with compound annual growth increases of 23.4% (to $363.7 billion) and 16.9% (to $323.9 billion), respectively by 2026.
Business travel spending in Latin America grew modestly in 2021 as the vaccination effort got off to a slower start. While there may be challenges in this region over the next few years, 55% growth in spending in Latin America is predicted for this year as business travel recovers to 83% of pre-pandemic totals.
Asia Pacific helped lead the industry in terms of recovery of spend in 2021, particularly in China. This reversed in 2022, as China’s Zero-Covid policy led to wide-scale lockdowns and other countries in the region only slowly opened back up. For 2022, an increase of 16.5% (or $407.1 billion) in spending is expected in APAC (held back by China at 5.6%, or $286.9 billion), with the region recovering to 66% of pre-pandemic levels by the end of 2022.
In July 2022, GBTA surveyed over 400 business travelers and nearly four dozen executive travel budget decision-makers across four global regions. Overall, sentiment is positive but also confirms Covid concerns are taking a back seat to current macroeconomic and geopolitical issues.
85% of business travelers said they need to travel to accomplish their business goals. Over three-fourths said they expect to travel for work more or much more in 2023 than they did in 2022.
84% of senior global corporate finance professionals voiced confidence that their travel spending would somewhat or significantly increase in 2023 compared to 2022.
73% of business travelers and 38 of 44 senior global financial executives agreed inflation/rising prices will impact travel volumes.
69% of business travelers and 33 of 44 global financial executives are concerned that a possible recession will impact travel.
68% of business travelers and 36 of 44 financial executives expect that Covid infection rates and variants will have an impact on their travel.
